MILAN — Roberto Cavalli Group is looking at expanding in China over the next five years, while reporting a return to profit in 2010. In the fiscal year ended Dec. 31, the Italian fashion company registered a profit of 5.7 million euros, or $7.5 million, compared with a loss of 7.3 million euros, or $10.1 million, in 2009.


Revenues dropped 6 percent to 176 million euros, or $232.2 million, hurt by a 27 percent drop in royalties from the Just Cavalli license and the sale of nonstrategic businesses, such as fabric printing plants that were not working with Cavalli exclusively. The Just Cavalli line was previously licensed to the troubled Ittierre, but is now to be produced and distributed by Staff International starting with the spring 2012 season.


Retail sales surged 29 percent.


A more efficient and streamlined company structure helped boost earnings before interest, taxes, depreciation and amortization to 25.5 million euros, or $33.6 million, compared with 22 million euros, or $30.5 million, in 2009.


Dollar figures were converted at average exchange rates for the periods to which they refer. The company is set to expand its signature brand, Just Cavalli and Class Roberto Cavalli labels in China through a joint venture agreement with UCCAL Group, headquartered in Shanghai. The Italian luxury fashion house will open a total of 85 stores in the next five years in China.


Chairman and designer Roberto Cavalli said he was pleased with the agreement, which “will allow millions of Chinese clients, who already know my creations, to finally be able to buy our products through an adequate…boutique network.”


UCCAL, which has yearly sales of $150 million and manages more than 700 retail sales points, has been distributing brands ranging from St. John and Isaia to Nike 360 Sportswear, Nike Sport Performance, Nike Golf, Kuhle and Jockey Underwear in China since 2002.


The Chinese retailer will expand both retail and wholesale channels with Staff International, which holds the license for the Just Cavalli brand, and with the Italian apparel manufacturer Dressing, the licensee for the Class Roberto Cavalli brand.


The agreements were inked for five years and are renewable for another five, starting from the spring 2012 season, and comprise the ready-to-wear, shoes and leather goods collections. The designer’s inaugural namesake stores are expected to be unveiled in Beijing and Shanghai either late this year or in early 2012. The boutiques will be directly managed by the new joint venture, Roberto Cavalli China Ltd. The designer will own 75 percent of the venture and UCCAL the remaining 25 percent. The goal is to open five Roberto Cavalli stores over the next five years.


Starting at the end of 2011, 50 Just Cavalli locations are slated to open over the next five years (in addition to the existing 10 units in the area), not only in main cities but in second- and third-tier ones. They will be directly managed by UCCAL.


In January, Roberto Cavalli Group and Staff International signed a 10-year licensing agreement for the global production and distribution of the Just Cavalli line, starting with the spring 2012 season.


Also, starting from the end of this year, 30 Class Roberto Cavalli stores will open in the next five years (an addition to 10 existing units).

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